Russian companies fearing western sanctions may freeze them out of the US dollar market are preparing to switch contracts to renminbi and other Asian currencies, the Financial Times reported Sunday, citing two top bankers.
In the past few weeks, large Russian corporations have shown a significant interest in various products denominated in renminbi and other Asian currencies, Pavel Teplukhin, head of Deutsche Bank in Russia, was quoted as saying.
Andrei Kostin, chief executive of state bank VTB, said expanding the use of non-dollar currencies is one of the bank’s main tasks.
The move to open trading accounts in renminbi, Hong Kong dollar or Singapore dollar comes as Russia’s relations with Europe have become strained.
Sanctions are pushing Russian companies to reduce their dependence on western financial markets while US and European banks have dramatically slowed their lending activity in Russia since its annexation of Crimea in March, the report said.
The central bank is working on a national payment system to reduce the country’s dependence on western companies such as Visa and MasterCard.
The chief executive of a Russian manufacturer that derives 70 per cent of its revenue from export in US dollars said his company is ready to move its contract settlements to different currencies in the event of further sanctions, the report said.
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